Tower Semiconductor Ltd.
) reported first-quarter 2013 earnings per share of 12 cents,
beating the Zacks Consensus Estimate of 16 cents loss per share.
AMKOR TECH INC (AMKR): Get Free Report
INTEGR DEVICE (IDTI): Free Stock Analysis
PERICOM SEMICON (PSEM): Free Stock Analysis
TOWER SEMICOND (TSEM): Get Free Report
To read this article on Zacks.com click here.
Management also provided an upbeat view for the overall
semiconductor market. Following the earnings release, shares shot
up 2.13% but dropped 5.82% in after-hours trading.
The company reported revenues of $112.6 million, down 33.0% year
over year and 23.7% sequentially. The decrease was due to planned
contraction in supply agreement with Micron Technology.
Reported gross margin for the quarter was 2.3%, down 1,120 basis
points (bps) year over year due to lower volumes.
Operating expenses (R&D and MG&A) of $19.5 million were
down 4.9% from $20.5 million in the year-ago quarter. Reported
operating margin was (16.7%), down significantly from the
year-ago quarter margin of 1.3%. Research and development
(R&D) expenses as well as marketing, general and
administrative (MG&A) expenses increased as a percentage of
The quarter's GAAP net loss was $23.2 million or loss per share
of 96 cents versus $19.3 million or 91 cents loss per share in
the comparable quarter last year. Excluding special items but
including stock-based compensation expense, non-GAAP net income
was $5.8 million or earnings per share of 12 cents.
The company ended the first quarter with cash, short-term
deposits and designated deposits balance of $119.7 million, down
from $133.4 million in the prior quarter. Trade receivables were
$80.0 million, up from $79.4 million in the prior quarter.
During the quarter, cash flow from operations was $18 million and
capex was $26 million. Additionally, Tower reduced its 2013 and
2014 principal payments from $105 million to $30 million.
This loan of $131 million carries a low interest of LIBOR+3.5%
with final maturity in May 2016.
For the second quarter of 2013, Tower expects total revenue in
the range of $122 to $132 million, up 13% sequentially at the
Israel-based Tower Semiconductor is a global specialty foundry
leader, which manufactures semiconductors using its advanced
production processes. The company reported a decent first quarter
with earnings exceeding the Zacks Consensus Estimate by a wide
We remain encouraged by the company's record number of full mask
tape-outs into Tower's 8" facilities and strong demand in the
Israeli 6" factory. Management also gave a strong second quarter
guidance, which indicates improving demand visibility and an
overall improving semiconductor market.
Additionally, we believe that the company's new products, design
win activity, strong customer acceptance and global market
expansion, including Europe, Korea and the U.S will continue to
drive Tower's growth.
Currently, Tower has a Zacks Rank #3 (Hold). Other stocks that
have been performing well and are worth considering include
Integrated Device Tech
), all carrying a Zacks Rank #1 (Strong Buy).